2015: Year of Opportunity for Federal Transportation Policy?

2015: Year of Opportunity for Federal Transportation Policy?

December 25, 2014  | ENO CENTER FOR TRANSPORTATION

As we look back on 2014, it is hard to draw many positive conclusions about recent progress on federal transportation policy. Congress did not do much of anything this year, and transportation was no exception. This was a year when Congress yet again faced a funding shortfall in the Highway Trust Fund (HTF), and Congress yet again punted and failed to resolve the issue. Meanwhile authorization for passenger rail, already expired, received no attention in the Senate and limited movement in the House. And though it is more understandable since the Federal Aviation Administration (FAA) reauthorization was not yet up for renewal, nothing much of substance happened in aviation either.

It is unclear whether this next Congress will be any better in terms of passing legislation. While one-party control of Congress could, ironically, create the opportunity for more bipartisan legislation, this will still necessitate this President and this Congress working well together, which has so far proven to be a challenge. However, the good news is that if there is a more effective legislative environment, there may be some real opportunities for making progress in transportation specifically. With a Republican Congress eager to show results, traditionally bipartisan issues like transportation are more likely to be dealt with effectively than other hot-button political issues like health care and immigration. Also there are committee chairmen for transportation in both houses who not only want to move legislation, but also have the skills necessary to do so.

Three authorization bills expire in 2015: surface transportation, passenger rail, and aviation. These bills provide three opportunities to move forward in transportation policy. The following are some policy priorities, from a transportation perspective, to keep in mind for each:

Surface Transportation

State of Play: Authorization expires May 31 with funding likely to run out around the same time.

Top Policy Priority: Moving forward on performance measurement.

Before we can even consider policy reform in surface transportation, we will have to yet again face an existential crisis for this program. While there has been some resurgent talk of a gas tax increase, even among some Republicans in Congress, this proposal remains a long shot. The issue most likely to be debated will be how large of an infusion of general funds will be put forward this time. Congress could go for more a “long-term” fix and attempt to use corporate tax reform or some other non-transportation related funding mechanism to prop up the HTF for a few years. Alternatively they could seek to keep the pressure on for a real long-term and sustainable solution by continuing to deposit small amounts of funds in order to keep returning to this issue.

If Congress does keeps doing short-term patches, there is less likely to be an opening for reforms. But if there is a longer-term patch, this provides a potential avenue for reform like the two-year MAP-21. The most needed continued reform is to begin to develop economic measures for evaluating transportation investment programs. MAP-21 began developing measures for safety, pavement conditions, and environmental outcomes. But very little was specified in the way of economic measures, such as accessibility. The next bill is an opportunity to move such measures forward. It also presents an opportunity to continue the conversation about providing incentives for performance. While MAP-21 requires federal grantees to set targets, it provides little incentive or penalty for meeting or failing to meet these targets. This next step is crucial if performance measurement is going to have a serious impact on investment decisions.

Passenger Rail

State of Play: Authorization expired in 2013. The House Transportation and Infrastructure Committee (T&I) passed a bill in September 2014 but no Senate bill was ever released and the bill will need to be re-introduced in the new Congress.

Top Policy Priority: Fostering competition for intercity passenger rail service.

The T&I bill, which will be the basis for any legislation in 2015, focused on fiscal reforms intended to reduce Amtrak’s annual appropriations. The bill contains some potentially positive reforms, and reducing costs and eliminating waste in government programs has its merits. But while it may be more popular to focus on reducing Amtrak’s cost, more direct attention needs to be paid to improving intercity transportation service. We continue to have very poor common carrier intercity ground transportation in this country. While intercity buses have seen resurgence on some routes, with private companies competing for passengers and providing service innovations, most intercity rail routes remain slow and bus routes between less populous destinations do not attract competitors. We will not be able to make improvements in this area simply by spending less on Amtrak.

Instead we should look for opportunities to introduce competition for intercity passenger rail service. The northeast corridor is one obvious place for this to happen – and it could happen rather rapidly by allowing operators besides Amtrak to compete for passengers. However, effective competition can only occur with adequate capital investment in the northeast corridor, an investment for which the federal government will need to pay the lion’s share. Outside of the northeast corridor, more work will be needed to enable an environment that fosters competition. Amtrak continues to battle freight railroads on issues of delays on several routes, and a Supreme Court decision on this issue is pending. Regardless of how the court rules, Congress should take steps to resolve this issue on critical corridors so that passenger rail at least has the opportunity to provide competitive service.

Aviation

State of Play: Authorization expires in September 2015.

Top Policy Priority: Air traffic control reform.

Perhaps the greatest opportunity for policy reform in transportation lies with the FAA reauthorization bill. This bill has created enormous challenges in the past, primarily due to fights over relatively insignificant items like slots at Ronald Regan National Airport or the Essential Air Service program. These problems may surface yet again, but there is growing agreement within the aviation community of a need to focus on reforming funding for air traffic control operations and improvements. The sequester and shutdown of 2013 created an environment of funding uncertainty that was directly counter to the national economic interest in aviation, and brought home the point that allowing Congressional control of our air traffic control funding may not be prudent. Meanwhile the current hodgepodge of fees that fund air traffic control, including taxes and general fund revenues, have very little semblance of logic to them. As a result they do not effectively fund the system, manage demand, or assist in providing certainty for making upgrades. All of these things are necessary for an effective, modern, air traffic control network. 

The good news is that the aviation community is working together to try and develop a reform proposal for funding and governance that enjoys broad support. Eno’s NextGen working group, co-chaired by former Senator Byron Dorgan and former Secretary of Transportation Jim Burnley (members of the Eno Board of Advisors and Board of Directors), is one of a handful of groups looking to develop a consensus-based proposal. Developing such a proposal will not be easy, but it appears to be more likely now than it has ever been in the past. Given the challenges that are likely to be faced in surface transportation, and the general lack of urgency Congress has shown with respect to passenger rail, aviation could be the big-ticket item that Congress tackles in 2015.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Eno Center for Transportation.

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